Paint

Raw Materials

The quality and continuous availability of raw materials is important in maintaining optimum
capacity utilization of plant at a high level
of production in order to achieve timely and greater returns on investment and also avoid delays
or stoppages in the production schemes.
The chemicals required for the production of paint include- pigments, extenders, binders,
solvents, special additives such as driers, biocides, acids, light stabilizers, inhibitors, anti-setting
agents and bodying agents (usually in small quantities).
Pigments:
A paint pigment is a fine powder that either scatters light strongly, to yield a white effect, or
absorbs certain wavelengths of light, producing a coloured effect. These give paints it distinctive
colorations, opacity, and perhaps protection. Typical white pigments are inorganic oxides such as
titanium dioxide (TiO2), antimony oxide (Sb2O3), and zinc oxide (ZnO). Other white, insoluble,
inorganic compounds are also frequently used, including: zinc sulphide, ZnS; white lead (the
hydroxycarbonate, hydroxysulphate, hydroxyphosphite, or hydroxysilicate of lead); and barium
sulphate, BaSO4. The following inorganic oxides are typical coloured pigments: iron oxide,
Fe2O3 (yellow, red, or brown colours); chromium oxide, Cr2O3 (green); lead oxide, Pb3O4 (red).
The chromates of lead, zinc, strontium, and nickel produce various shades of yellow and orange.
A variety of organic solids are used for other colours. They include titanium dioxide, white lead,
zinc oxide, carbon, chromium, cadmium dyes, and metallic pigments like aluminum, copper, and
other metallic powders.

These pigments can be sourced locally from major companies that deal on industrial chemicals
such as Roche and BASF, both situated in Lagos

Extenders (Mineral Powder)

These are also forms of pigments but differ because they are usually white substances such as
barium carbonate, kaolin, gypsum, talc, and silicate. These materials are used to cheapen paints

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and improve its brushing characteristics and toughness at the same time reduces gloss. These are
available locally at Nigerian Roche Limited, Ikeja, Lagos.
!

Binders:
These are substances which bind the pigments and give the paint a hard durable surface on
drying. Paint dries off usually by evaporation, oxidation or polymerization. Emulsion paint, for
instance, dries by evaporation. Binder consists of polymerized solution of particles in water.

The drying of oil-based paints generally contains a binder which is a mixture of oil and resin.
Very broad range of substances used as binders in paint except oil, occurs in nature or are
produced synthetically. These include:

 Natural Products: Congo Copal, dammar resin and shellac.

 Synthetic: Alkyd, polyester, acrylic, vinyl, styrene, polyurethane, etc.
These are available at Nycil, Otta, Ogun State and Nigerian Hoechst, Lagos.

Additives:
These are grouped into driers, biocide acids, and light stabilizers, inhibitors, anti ~ setting and
bodying agents. They perform significant roles in paint technology as dictated by their names.
These are available at Nycil.
Solvents (Thinners):
These are liquids that are mixed into paint to reduce its viscosity and increase its flowing
properties when preparing it for application to a surface. After the paint has been applied, the
solvent quickly evaporates. The solvent or thinner for drying oil paints is generally turpentine—a
mixture of cyclic hydrocarbons containing ten carbon atoms—or a mixture of suitably volatile
hydrocarbons derived from petroleum distillates. The solvent for most synthetic vehicles is an
alcohol, a ketone, or an ester.

Examples include white spirits, oxygenated solvents, aromatics, etc. these are available in Nycil
Limited, Otta, Ogun State.

Various solvents which are products of petrochemical industries are other raw materials needed
and are available locally from oil companies like Mobil, Conoil etc. The likelihood of any
significant supply problem with these raw materials is therefore remote as they abound in large
quantities in Nigeria.

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Process Technology
A modern paint formulation consists of several different categories of chemical compounds and
these are known as vehicles which form the adherent, skin-like coating. The pigment is dispersed
in the vehicle and the mixture gives the final film its colour and binding characteristics while and
the solvent, or thinner, evaporates shortly after the coating has been laid. The vehicle can be an
unsaturated, or drying oil, which is an ester formed from the reaction of a long-chain carboxylic
acid, such as linoleic acid, with a viscous alcohol, such as glycerin or it can be a polymer. The
drying oil, therefore, is a monomer when it is in the can and becomes a polymer after being
applied to an exposed surface. Filler, containing powdered components such as kaolin or barium
sulphate, enhances the strength of the dried film of paint.

If the vehicle is a synthetic polymer, it is dispersed in a suitable solvent, so that as the solvent
evaporates the individual macromolecules come into contact and become enmeshed to the
applied surfaces. The solidification is improved by the presence in the solvent of a
polymerization catalyst, called a drier. The types of synthetic polymer most widely employed as
paint vehicles are: alkyd resins, which are polyesters of a polyhydric alcohol, such as glycerol,
with a polybasic acid, such as phthalic acid, nitrocellulose, in which cellulose is de-polymerized,
the small molecules are nitrated, and the molecules are re-polymerized; phenolic resins; acrylic
resins; epoxy resins; polyvinyl acetate resins and polyurethane.

Grinding:
The necessary raw materials to be grounded are prepared in movable drum and transferred to the
Pearl-Mill which is equipped with special pump for conveying the materials to the grinding
chamber. The raw materials are then grounded in the Pearl- Mill by means of steel balls in a
grinding drum which is subdivided into three grinding chambers, the chambers are separated
from one another by rotating discs so that the balls can pass evenly through all the chambers. The
finished product from this exercise is again transferred to the movable drums which serve the
dual purpose of product dissolution and preparation.

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Dissolver:
The movable drums are then pushed into the dissolving tanks. This process takes place in an
enclosed environment to prevent workers from inhaling noxious odours and fumes and prevent
the loss of solvents to the ambience. The dissolver being a multi-stage rotary mixing element,
like a turbine, enables the mixing unit (cage stirrer) suck the mixture to be dissolved into the top
feed opening. The material is subjected to continuous beating and stirring through the alternating
soaking and dissolving action to obtain a pure homogenous mixture. The end product
(concentrate) which is the base for the paint is now transferred to the mixing station.

Mixing:

The base is properly mixed with thickening agents, anti-bacterial and anti-fungal additives and
some other minor chemicals. The mixer is a versatile machine and has been designed in such a
way that contacts surfaces convert the full drive power into flow energy. The machine head can
be raised and lowered electro- hydraulically as needed and care must be taken during the mixing
stages to ensure that a correct material consistency is achieved. The required paste is arrived at
by the addition of water:

In order to produce colours other than white, the base is transferred to the colouring station
where pigments or dyes are added to produce the desired colour. Any colour could be produced
to match request.
Packaging:
The finished products are poured into containers, corked and finally transferred to the finished
goods section for storage and sales.

Manufacturing Process of Paints and Blending of Marmoran Specialized Wall Coatings

The raw materials, which are dispersed with pigment and additives, constitute the main
ingredients. These are let down with inputs such as Binders, Biocide Marble dusts and other
Textured materials after which the entire batch is milled with thinning down and packaging.

In the blending of the wall coatings however; the raw materials that are already predetermined by
the primary producers through specialized mixing formula could be identified from the blending
process. These are pigments, additives, binders, biocide and textured materials like marble dusts.

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Blending process for production of this specialized wall coating and other finishes is outlined in
the flowchart below.

RAW MATERIALS

Inputs (Pigments and Additives)

DISPERSION

Inputs (Binders and Biocides)

LET DOWN

Inputs (Textured materials like Marble

dust)

MIXING

THINNING

PACKAGING

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Finished products are poured into 20 and 200 liter drums of metal containers, corked and finally
transferred to end users for application.

The Products
Paints
Paint and Varnish [liquids that solidify when exposed to air] are used to cover surfaces for
decorative and protective purposes. Paints are formed by mixing a pigment (the substance that
provides colour) with a binder, a fluid vehicle, such as resins or linseed oil that solidifies when
exposed to air. A varnish is a transparent solution that solidifies into a protective coating.
Opaque and coloured varnishes are called lacquers. A modern paint formulation consists of
several different categories of chemical compound. The vehicle forms the adherent, skin like
coating; the pigment is dispersed in the resins and gives the final film its colour and hiding
power; and the solvent, or thinner, evaporates shortly after the coating has been laid. The resins
can be an unsaturated, or drying, oil, which is an ester formed from the reaction of a long-chain
carboxylic acid, such as linoleic acid, with a viscous alcohol, such as glycerin; or a polymer
filler, containing powdered components such as kaolin or barium sulphate, enhances the strength
of the dried film of paint.

Paints are decorative and protective surface coating materials obtained through the mixture of
chemicals in right and molecular proportions. They can be used for surface of objects like metal,
wood, walls, etc. It is widely used in the building, industrial and automotive industries.

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Broadly speaking, paints are of two major types:
-Decorative and
-Industrial.

The decorative paints include the standard and premium grade of gloss and emulsion undercoat,
while the industrial paints include a wide range of specialized industrial finishes supplied to end
users for product line application. The different types of industrial paints include Aluminum
paints (heat resistance), lacquer (dries very rapidly and used for the car industry), chlorinated
rubber paint (chemical resistance) and Thixotropic paints (non- drip paints)

Paints, because of their varied uses, touch directly or indirectly on human everyday life. With the
springing up of new buildings (both government and private structures), renovation of some
existing structures and growth of industrialization the demands for this products are ever
increasing on a daily basis.
In the paints industry, what matters most is quality. Once there is guaranteed high quality
standard, the daily demand may be difficult to meet. The ALTIMA brand, already introduced
into the Nigerian market, is considered among the best in terms of quality standard.

The wide range of the products commits them to wide usage within the industrial, corporate and
domestic spheres.

The general areas of usage are

1. Personal, residential and industrial buildings
2. Oil and Gas industries
3. Automotive and Marine Sectors
4. Construction industry
5. Plastic and Ink industry
6. Paper making industry

Demand and Supply of Paint

Demand:

Nigeria with its large population and potential for industrial growth constitutes a vast market for
paint. In Nigeria, there are two major demand segments for paints
- Industrial and
- Domestic consumers.

Domestic consumers are mostly individual household consumers while industrial consumers
comprise the following:

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  Civil and Structural Engineering Companies
 Furniture Industry
 Motor Assembly Industry
 Packaging Industry
 Manufacturers of Household and Industrial Appliances
 Schools, Hospital and other Organizations
 Oil Industry
 Marine Engineering and Shipping Companies
Industrial/institutional buyers constitute the bulk of the consumers (about 40% of total supply).
Invariably, expansion of the construction and manufacturing sectors of the economy will
reinforce demand for paints.

In 1994, demand for paints was 55.2 million liters per annum. In 1997, it rose to about 71.4
million liters. However, demand fell in 1998 due to economic recession, picking up gradually to
reach 61.2 million liters in 2002 as can be seen in the table below:
Year Qty (Million Liters)
1994 55.2
1995 60.6
1996 66.6
1997 71.4
1998 51.9
1999 54.0
2000 56.2
2001 58.5
2002 61.2

The size of the market is derived from deductions considering:

 Structure of paint consumption in market segment
 The price of paints
 Assumed proportion of paint based on alkyd/polyester paint constituents.
 Proportion of imports vs. local production.

Presently total consumption of paints in Nigeria is about 65 million liters per annum of which
only 43% is currently made by local production prior to recent large scale ban on importation.
This equals to per capita consumption of 0.54 liter compared to 1 liter in Cote d’Ivoire and 0.6
liters in Ghana. Per capita consumption in Europe is between 15-20 liters. The relatively low per

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capita consumption in Nigeria reflects poor economic conditions. Per capita consumption was
much higher in the 70s. These comparative figures indicate prospects for growth in demand if the
economy grows.

Supply:

There have been two sources of supply of paint in Nigeria-local manufacturers and importation

Local manufacturers:

Although there are speculations that there are currently about 120 paint firms in the country, only
about 60 are actively producing paints with a total installed production capacity of about 1,147
million liters. Investigation revealed that the other paint firms merely exist in name. Some of the
companies were floated during the import license era to enable the owners of such companies
obtain import licensees which were used for other purpose. Before 1994, there were only ten
major paints manufacturing firms in the country with a total installed capacity of about 76
million liters. However, between 1994 and 1997, there was an increase in the total installed
production capacity as a result of high demand for paint.

However, since 1998, there has been a dip in supply of paint consequent upon economic
depression. Empirical evidence shows that the current total capacity utilization of the paint
industry has increased phenomenally from the late 1990s.

The table below shows the supply of paint between 1994 and 2002.
Domestic Production of Paint (1994 - 2002)
Year Qty (Million Liters)

1994 31

1995 47

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 1996 58
1997 58
1998 25
1999 30
2000 22
2001 29
2002 36
Importation
There are no official records of quantities of paints imported into the country, more so, as it was
one of the banned items before 1986. Industry sources however revealed that in 2002, about 2.4
million liters of paints were imported into the country. If this figure is added to the quantity of
paint supplied locally, total supply in 2002 would amount to about 38.4 million liters. Some of
the imported brands include Grown, Home Charm, Sport-on, Sterling, Brolac, McPherson,
Sigma, Supaflo, Dulux, Marmoran etc.

Future Trend
From all indications, there are certain socio-economic factors that will influence demand for
paint positively in the future. Some of them include the following:

Development in the Construction Industry.

Majority of the development projects going on in the country, especially at Abuja and in most of
the state capitals are in the construction and civil engineering sector, and could account for a
significant consumption of paints. New constructions like schools, offices, accommodations,
industries, etc which are being built will require paints.

Population
The population of Nigeria is increasing at a very rapid rate with consequent increase in number
of dwelling and commercial houses. According to reports, the federal and most of the state
governments are already executing plans, which would enable most Nigerians to own houses, in
fact, there is no end to building projects given the interest, commitments and funding

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arrangements by most of the financial institutions lately. The implication is that as the number of
houses built increases, the demand for paints that would be used in painting them would also
increase.

Increase in Income

Resulting directly from economic growth is increase in purchasing power of individual

consumers. With increase in disposable income, more people will be able to undertake the
painting of their house/rooms on a more regular basis, and this will lead to increased demand for
paint.

Demand Projection
In projecting demand, therefore, all the factors mentioned above should be taken into
consideration. Evidence shows that demand for paint grew at an average rate of about 8.96% per
annum in the years that proceeded 1998. Although, "per capita" consumption of paint in Nigeria
is very low- about 0.5 liters compared to developed countries where it is between 4 and 6 liters, it
was marginally higher than the world average growth rate of about 8%. However, since the
economic recession started, the purchasing power of many individuals and organization has been
drastically reduced. Subsequently, consumption of paints also fell (but is currently picking up) ,
In projecting demand therefore, it is conservatively assumed that consumption of paints would
grow at an average rate of about 6% per annum, since it would be unwise to use the 8.96%
growth rate that prevailed before the economic recession set in. At this rate, all things being
equal, demand could reach about 81.9 million liters by 2007 as shown below.

Projected Demand (2002-2007)

Year Qty (Million Liters)
2002 61.2
2003 64.9
2004 68.8
2005 72.9
2006 77.3
2007 81.9

The Supply Gap

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Comparing the tables above, we can identify huge supply gap in the paint industry. These supply
gaps create opportunity for new market entrants. This further explains why the promoters are
interested in embarking on this project. The table reveals the supply gap in the paint industry:

Supply/Demand Gap in the Paint Industry (2002-2007) In Million of Liters

Year Demand Supply Gap

2002 61.2 38.4 22.8
2003 64.9 44.1 20.8
2004 68.8 47.6 21.2
2005 72.9 51.4 21.5
2006 77.3 55.5 21.8
2007 81.9 59.9 22.0

From the foregoing, it could be seen that the supply gap is large, averaging about 21.7 million
liters per annum. This shows that the paint industry is not responding adequately to the
opportunities offered by the expanding market. The proposed company intends to successfully
exploit these gaps created in the industry especially in Lagos, Abuja and Port Harcourt where
showrooms would be sited. For now, the company is making serious inroads in Abeokuta,
Oshogbo, Akure, Ilesha and as far flung as Benin to exploit the market potentials of these areas.

Competition

All major paint manufacturers in Nigeria belong to the Paint Manufacturers Association of
Nigeria (PMAN). PMAN is a sub-group of the Chemicals and Pharmaceuticals segment of the
Manufacturers Association of Nigeria (MAN). The PMAN, established in 1982 with eighteen
member firms, has grown to over two hundred registered members.

As of year-end 1997, the PMAN estimated that there were at least over two hundred unregistered
candidate member firms. The association has experienced remarkable growth over the past
several years. It states a membership total installed production capacity of over 150 million liters
of assorted paints per year. According to a recent market survey by the Paint Manufacturers
Association of Nigeria (PMAN) and the Bank of Industry (BOI), annual paint consumption was

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 estimated to be over 60 million liters. The consumption pattern was estimated to be growing at
about 6% - 8% per year. The leading paint manufacturing companies are benefiting from this
growth. Below are the major industry’s players and their market shares.

Company Market Description Competing Product

Share

1 Berger Paints Nig Plc 12% The oldest and largest coy in Architectural,
the industry with European Automotive and
roots maintenance coatings

2 CAP Plc [formerly ICI] 8% Second oldest paint coy in Architectural,

Nigeria with ICI affiliation Automotive &
Maintenance and
Industrial

3 IPWA Plc 4% An old paint coy with UK Architectural,

parent affiliation Maintenance &
Industrial

4 DN Meyer 6% formerly affiliated with a Architectural,

foreign partner Maintenance, Auto and
Industrial

5 Portland Products Ltd 4% Private coy with strong parent Architectural;, Building
coy and sanitary

6 African Paints Plc 3% Indigenous paint coy Architectural & Auto

7 Premier Paints Plc 2.5% Major importer of raw materials Industrial and
Automotive

8 Sikkens 2.5% Largest market shareholder automotive

60% Dutch coy

9 PCI Paints Ltd 3% Indigenous and undergoing Decorative and auto

financial/operational changes

10 Regency Coy Ltd 3% Managed by expatriate team Architectural and

Automotive

11 President Paints Ltd 2% Focus on low priced products Architectural and

Automotive

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With the established profiles of the above structured key players in the industry, the proposed
company intends to pursue vigorously the marketing aspect and hence sales of its products by
creating a niche within its area of operation and its environs. The majority of the key players
have their operational base in Lagos and given the demand/supply gap in Nigeria, they cannot
satisfy the entire market and this implies that other unmet demands can be taken care of by other
up and coming players.

To achieve the above objectives, the company proposes to adapt and adopt the following
marketing strategies which can nurture the products to acceptable prominence.

Marketing
For any new firm to make meaningful impact in the market scene there will be need to adapt and
adopt certain strategies which can nurture its products to national prominence. Some of them are
outlined below:

 The products of the firm should be of high quality. In fact, there should be no difference in
terms of quality of the imported products and the local outputs which the blending franchise
will produce. To ensure high quality standard, only qualified and highly experienced staff
should be employed to man all the operation areas of the outfit.
 The product should be widely advertised, using such medium as Newspapers, Radio and
Television. Bill boards, Posters and Handbills could also be used to create awareness among
consumers. Other promotional items such as T-shirts, Car- stickers, could also be used.
 The Directors are to be personally involved in the marketing of the products. They are
expected to use their wide networks in obtaining contracts for the company's execution.
 Anyone who wins contract or any outstanding order for the company should be motivated by
prompt payment of generous commission.
 Price of the products of the firm should not be very competitive so as not to discourage
potential users. The price should be a function of the stage in product cycle which for all
intents and purposes is introductory.
 Offices with sales representatives would be set up in major cities of Nigeria. This will create
outlets for show-casing the firm’s products at different parts of the country.
 Sample demonstrations would be offered to customers.
 The products would be launched in series of media-publicized events to which prominent
persons in the construction and property development business, including government
officials and dignitaries will be invited to create awareness for the products.

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 Constant training, both in house and external (local and International) should be given,
especially to functional staff.

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